Stocks To Watch - Index stocks, Sona, Pesona, I-Bhd, PA, Media Prima, New Hong Fatt

KUALA LUMPUR (July 30): As Fitch Ratings has downgraded Malaysia’s outlook to “negative”, index-linked stocks may be hit tomorrow if there are no  major positive news to cushion the possible negative impact from this downgrade.

The weak outlook for the ringgit, which has fallen to a three year low against the US dollar, is also negative for the general stock market.

Fitch Ratings said today it has revised Malaysia's outlook to “Negative” from “Stable” as the prospects for addressing Malaysia’s weaknesses in its public finances have worsened in May 2013.

But Malaysia’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) have been affirmed at 'A-' and 'A', respectively. The Short-Term Foreign Currency IDR has been affirmed at 'F2' and the Country Ceiling at 'A'.

“The revision of the Outlook to Negative reflects Fitch's assessment that prospects for budgetary reform and fiscal consolidation to address weaknesses in the public finances have worsened since the government's weak showing in the May 2013 general elections,” said the global ratings agency in a statement today.

Fitch added: “Malaysia's public finances are its key rating weakness.”

Other stocks that may stir some interest tomorrow could include Sona Petroleum, Pesona Metro, I-BHD [], PA Resources, Media Prima and New Hong Fatt.

Sona Petroleum Bhd saw its shares rising 5% and warrants soaring 247% in super active trades on the first day of their listing today.

Sona share rose by 2 sen to 44.5 sen on trades of 401.5 million shares, while its warrant jumped 18.5 sen to 26 sen on 692.5 million units.

The warrant may come under profit-taking pressure if investors are happy with their quick and high returns.

Pesona Metro Holdings Bhd has bagged a RM149.6 million-contract for the CONSTRUCTION [] and completion of a Malaysian government building complex in Johor.

In a filing with Bursa Malaysia, the construction and engineering company said its wholly owned subsidiary Pesona Metro Sdn Bhd had received a letter of award from the joint venture of Intrasegi Sdn Bhd and Tegas Setuju Sdn Bhd.

Pesona Metro Holdings said the project will take 30 months to complete and expects a completion date of January 29, 2016.

“The award of the project… is expected to contribute positively to the earnings and enhance the net assets of the group during the duration of the project,” said Pesona Metro Holdings.

I-Bhd, the developer of the i-city township, expects revenue from its leisure business to double next year from RM32 million last year.

Information Manager of I-City PROPERTIES [] Sdn Bhd Tan Soke Cheng said the higher income will be boosted by an increase from online ticketing contribution as well as introduction of new attractions, Bernama reported.

"Overall, we anticipate a 20 per cent rise in contribution from our online ticketing business," she told reporters at a briefing here today.

MEDIA PRIMA BHD [] has signed a multi-year licensing agreement with Paramount Pictures Corp to air major blockbusters on its free-to-air TV networks in the coming months.

in a press statement today, Media Prima said viewers of TV3, TV9, ntv7 and 8TV will be able to watch acclaimed movie titles such as Transformers: Dark of the Moon, Iron Man 2, Mission Impossible: Ghost Protocol, as well as Shrek Forever After.

PA Resources Bhd plans to place out up to 95.07 million new shares or 10% in the aluminium-processing entity to third-party investors.

In a statement to the exchange today, PA said the proposed private placement aims to raise funds which will finance the company's machinery purchase, and working capital needs.

PA said it has not fixed the price for the placement shares. "In any event, the issue price of the placement shares shall not be lower than the par value of PA shares of 10 sen each," the firm said.

The exercise is due for completion by the third quarter of 2013.

NEW HOONG FATT HOLDINGS BHD [] said its its wholly-owned subsidiary, New Hoong Fatt Auto Supplies Sdn Bhd, (NHFAS), has entered into a power purchase agreement with TENAGA NASIONAL BHD [] (TNB) for the sale of energy to TNB for a 21-year concession.

Under the agreement, NHFAS is scheduled to sell renewable energy to TNB commencing from September 2013 for a period of 21 years at the Feed-in Tariff rate of RM1.1812 per kWh as per the Feed-in Approval.

NHFAS has been granted Feed-in Approval by the Sustainable Energy Development Authority Malaysia to supply 178kW pursuant to the Renewable Energy Act, 2011, it said.

“Even though this arrangement with TNB will contribute to the revenue stream of the group throughout the concession period, the aforesaid project is not expected to have any material effect on the net assets and earnings of the group for the financial year ending 31 December 2013,” the company said.




Written by Ho Wah Foon of theedgemalaysia.com